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Purchasing the Home

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Purchasing the Home

In our lives we have bought and sold a number of properties.  Some fraught with angst and some uncomplicated.  However, nothing could have prepared us for the intricacies and nuances of negotiating in another language and in another  country.

 I compare it to line about Ginger Rogers. 

“She did everything Fred Astaire did, but backwards and in high heels.”

To add to the complexity we were not only dealing in ‘English to Italian’, but the seller was from the Netherlands and doing business in Dutch.   

We were also laboring under the illusion that negotiating and purchasing a home would work the same in Italy as it does in the U.S. 

Unlike the United States, the commission due to the agency is not calculated into the sale price, but added to it!!!

10% for non Italian citizens

4% if you purchase from a company

3% if you are Italian citizens

And did I mention VAT (value added tax) which trumps any sales tax that we have in this country.

4 % prima casa

10% seconda casa

Since the house had been designed by the former owner as three separate houses, what was the tax implication?   

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His desire had been to have an agriturismo a combination of the words  “agriculture” and “tourism” and  a style of vacationing in farm house resorts codified into Italian law in 1985.

An agriturismo vacation is suitable for the whole family and some places even be very romantic or luxurious.

But after purchasing the 100 year old farmhouse as a ruin, renovating, bringing electricity and water to the house, he had most likely run out of money and set aside the idea of an agriturismo. 

So were the 3 houses (a 3 bedroom, 2 bedroom and 1 bedroom) that made up the property considered 3, 2 or 1 house for tax purposes? Did we need to pay taxes on all three???  This became a ‘sticking point’ as to how the house would be viewed by the Comune, the local and powerful governing board that decides your fate.   This decision would take nearly a year plus 8,000 euro  to change the registration of the home from ‘agriturismo’ to ‘residential’ and for the decision of the number of houses as well.

Ultimately, the Comune ruled to view the property as 3 homes, increasing our tax exposure to 3 homes…..not two….or one.

But,  non preocupare (don’t worry) we had a plan…..

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